When an employee experiences a qualifying life event, they can make updates to their health benefits coverage by submitting proof of the QLE within 30 days of the event.
Otherwise, all changes must happen during your company's open enrollment period.
Keep in mind that the new coverage following a qualifying life event will begin on the first of the following month. For example, if you lost coverage on May 15th and are selecting new plans, your coverage will be effective as of April 1st.
If you’re getting married or entering a domestic partnership, your new coverage will start on the 1st of the following month. For example, if you made it official on May 15th and wanted to add your partner to your plans, their coverage under Justworks would be effective as of June 1st.
Insurance Billing with a Qualifying Life Event
With a change in coverage comes a possible change in cost for both the employee and employer. When an employee experiences a qualifying life event, you can expect to see new billing go into effect on the payroll following the employee’s election.
Switching to a More Expensive Plan
Employer: As an employer, you will see credits on the next payroll invoice for the amount of employer contributions paid on the employee's previous plan, for the month(s) the coverage is being backdated for. In the same invoice, you will be debited for the increased employer contribution for the new plan and/or tier.
You, as the employer, will essentially be paying for the difference in premium amounts for any months that were already paid for through credits and debits, along with paying the new premium amount moving forward.
Employee: Billing for the employee works a bit differently. Employee billing will take into account the differences in premiums but will not display the debits and credits the way the company invoice will. Instead, the employee will be charged a greater amount for their insurance premiums on the following payroll. The employee will be charged for any outstanding premium as well as the premium for the current pay period.
Switching to a Less Expensive Plan
When an employee switches to a less expensive insurance plan, the employer and employee will be reimbursed for overpaid premiums for the months the coverage is being backdated.
Employer: Similar to the behavior mentioned above, the employer will be given a credit for any premiums paid for the original plan and then debited for the new plan. The amount of funds returned will be the difference in cost between the original plan and the new plan.
Employee: Employees who have overpaid for insurance premiums will receive credits on their accounts automatically. These credits will apply to the new plan option. The members won’t see deductions from their paycheck (or reduced contribution amounts) until they reach the credit amount. Once their credit has reached $0, they will see deductions from their paycheck as normal.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.